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Cooper Companies' restructuring boosts cash flow and savings, supporting ongoing share repurchases.
The Cooper Companies, Inc.’s (COO - Free Report) growth is fueled by CooperVision’s premium lens migration and MiSight’s myopia-management leadership, supported by CooperSurgical’s women’s health and fertility portfolio. However, channel volatility, private-label transition risks, Asia-Pacific softness, and tariff/FX pressures weigh on near-term performance. Long-term opportunities remain strong, but execution and regional challenges could affect margin resilience and growth trajectory.
Shares of this Zacks Rank #2 (Buy) company have gained 15.5% in the past six months compared with the industry's 12.9% growth. The S&P 500 Index has increased 14.5% in the said time frame.
The Cooper Companies, with a market capitalization of $16.19 billion, is a global specialty medical device company.
Image Source: Zacks Investment Research
COO’s bottom line is estimated to improve 7.8% over the next five years. Its earnings beat estimates in three of the trailing four quarters and met in one, delivering an average surprise of 2.41%.
What's Driving COO’s Performance?
Accelerating MyDay Momentum Supports Sustained Share Gains: CooperVision’s MyDay daily silicone hydrogel franchise is emerging as a durable growth engine. Management highlighted accelerating global rollout, strong uptake in torics, multifocals, and Energys variants, and expanding private-label contract wins across the United States and Europe.
Importantly, capacity constraints that previously limited penetration — particularly in Asia-Pacific — have been resolved, enabling steadier execution. While daily silicone hydrogel lenses carry lower gross margins, MyDay generates higher revenues and operating profit per patient, supporting earnings leverage. This momentum underpins confidence in continued market-share gains and a stronger fiscal 2026 trajectory.
MiSight Myopia Control Remains a High-Growth, Differentiated Asset: MiSight continues to stand out as the only FDA-approved contact lens for myopia control, delivering 37% growth in the fourth quarter and nearly $104 million in fiscal 2025 sales.Management guided 20-25% growth in fiscal 2026, with upside from launches in Japan and expanded European markets. The upcoming silicone hydrogel platform enhances comfort and adoption potential, while rising global awareness of pediatric myopia supports long-term demand.
Although competition may temper near-term U.S. growth, Cooper’s clinical leadership and first-mover advantage position MiSight as a structurally attractive, high-margin growth vector over the medium term.
Reorganization Delivers Margin Expansion and Cash Flow Inflection: The recently completed reorganization and integration program is a material earnings catalyst. Management expects nearly $50 million in annual pretax savings beginning fiscal 2026, driven by streamlined support functions, AI-enabled productivity, and disciplined operating expense control.
Despite modest gross margin pressure from tariffs and product mix, operating margins expanded to 27% in the fourth quarter, with further improvement guided for the next fiscal year. Crucially, these savings are translating into cash — fourth-quarter free cash flow reached $150 million, and the company raised its fiscal 2026-2028 cumulative free cash flow target to more than $2.2 billion, enhancing financial flexibility.
Shareholder-Friendly Capital Allocation Enhances Equity Appeal: Cooper’s capital allocation strategy increasingly emphasizes shareholder returns. The company repurchased nearly $300 million of stock in fiscal 2025 — approximately two-thirds of free cash flow — and plans a similar allocation in fiscal 2026, supported by a $2 billion authorization. Net leverage improved to 1.76x, while free cash flow is expected to rise to $575-$625 million in fiscal 2026 as CapEx normalizes. The addition of total shareholder return (TSR) metrics to executive compensation further aligns management incentives with equity performance. Collectively, these actions strengthen the investment case for disciplined, shareholder-oriented value creation.
What's Weighing on the Stock?
Gross Margin Pressure From Mix Shift and Tariffs: While operating leverage is improving, Cooper faces ongoing gross margin headwinds. Management acknowledged that increasing penetration of daily silicone hydrogel lenses — central to MyDay’s growth — pressures reported gross margins, as these products sit below divisional averages.
Tariffs continue to weigh on margins, with management guiding to further gross margin decline in fiscal 2026 despite FX tailwinds. While higher revenue per patient and cost savings help offset the impact at the operating margin level, sustained mix-driven pressure could constrain earnings upside if pricing power weakens or cost efficiencies fail to scale as expected.
Regional and End-Market Volatility, Especially in Asia-Pac and Fertility: Asia-Pacific remains a notable swing factor, with China down 28% in fourth-quarter due to weakness in low-margin e-commerce channels. Management is intentionally avoiding aggressive pricing, prioritizing profitability over volume, which may cap near-term regional growth.
In the CooperSurgical segment, fertility demand remains sensitive to consumer spending, particularly outside the United States, leading management to guide conservatively for next fiscal despite early signs of improvement. Prolonged macro pressure or slower-than-expected recovery in these areas could dampen consolidated growth and delay anticipated second-half acceleration.
Estimate Trend
The Zacks Consensus Estimate for fiscal 2026 revenues is pegged at $4.31 billion, implying growth of 5.3% from the year-ago reported figure. The consensus mark for adjusted EPS is pinned at $4.51, indicating an improvement of 9.5% from the previous year’s recorded level.
In the past 60 days, COO’s earnings estimate for fiscal 2026 has moved north 11 cents.
Phibro Animal Health, sporting a Zacks Rank #1 (Strong Buy) at present, has an estimated long-term growth rate of 12.8%. PAHC’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 20.77%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Phibro Animal Health’s shares have rallied 47.1% against the industry’s 4.6% decline over the past six months.
Insulet, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 29%. PODD’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 17.75%.
Insulet’s shares have lost 7.7% compared with the industry’s 4.6% decline in the past six months.
Cencora, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 11.9%. COR’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 4.9%.
Cencora’s shares have gained 13.5% compared with the industry’s 6.1% growth in the past six months.
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Reasons to Add Cooper Companies Stock to Your Portfolio Now
Key Takeaways
The Cooper Companies, Inc.’s (COO - Free Report) growth is fueled by CooperVision’s premium lens migration and MiSight’s myopia-management leadership, supported by CooperSurgical’s women’s health and fertility portfolio. However, channel volatility, private-label transition risks, Asia-Pacific softness, and tariff/FX pressures weigh on near-term performance. Long-term opportunities remain strong, but execution and regional challenges could affect margin resilience and growth trajectory.
Shares of this Zacks Rank #2 (Buy) company have gained 15.5% in the past six months compared with the industry's 12.9% growth. The S&P 500 Index has increased 14.5% in the said time frame.
The Cooper Companies, with a market capitalization of $16.19 billion, is a global specialty medical device company.
Image Source: Zacks Investment Research
COO’s bottom line is estimated to improve 7.8% over the next five years. Its earnings beat estimates in three of the trailing four quarters and met in one, delivering an average surprise of 2.41%.
What's Driving COO’s Performance?
Accelerating MyDay Momentum Supports Sustained Share Gains: CooperVision’s MyDay daily silicone hydrogel franchise is emerging as a durable growth engine. Management highlighted accelerating global rollout, strong uptake in torics, multifocals, and Energys variants, and expanding private-label contract wins across the United States and Europe.
Importantly, capacity constraints that previously limited penetration — particularly in Asia-Pacific — have been resolved, enabling steadier execution. While daily silicone hydrogel lenses carry lower gross margins, MyDay generates higher revenues and operating profit per patient, supporting earnings leverage. This momentum underpins confidence in continued market-share gains and a stronger fiscal 2026 trajectory.
MiSight Myopia Control Remains a High-Growth, Differentiated Asset: MiSight continues to stand out as the only FDA-approved contact lens for myopia control, delivering 37% growth in the fourth quarter and nearly $104 million in fiscal 2025 sales.Management guided 20-25% growth in fiscal 2026, with upside from launches in Japan and expanded European markets. The upcoming silicone hydrogel platform enhances comfort and adoption potential, while rising global awareness of pediatric myopia supports long-term demand.
Although competition may temper near-term U.S. growth, Cooper’s clinical leadership and first-mover advantage position MiSight as a structurally attractive, high-margin growth vector over the medium term.
Reorganization Delivers Margin Expansion and Cash Flow Inflection: The recently completed reorganization and integration program is a material earnings catalyst. Management expects nearly $50 million in annual pretax savings beginning fiscal 2026, driven by streamlined support functions, AI-enabled productivity, and disciplined operating expense control.
Despite modest gross margin pressure from tariffs and product mix, operating margins expanded to 27% in the fourth quarter, with further improvement guided for the next fiscal year. Crucially, these savings are translating into cash — fourth-quarter free cash flow reached $150 million, and the company raised its fiscal 2026-2028 cumulative free cash flow target to more than $2.2 billion, enhancing financial flexibility.
Shareholder-Friendly Capital Allocation Enhances Equity Appeal: Cooper’s capital allocation strategy increasingly emphasizes shareholder returns. The company repurchased nearly $300 million of stock in fiscal 2025 — approximately two-thirds of free cash flow — and plans a similar allocation in fiscal 2026, supported by a $2 billion authorization. Net leverage improved to 1.76x, while free cash flow is expected to rise to $575-$625 million in fiscal 2026 as CapEx normalizes. The addition of total shareholder return (TSR) metrics to executive compensation further aligns management incentives with equity performance. Collectively, these actions strengthen the investment case for disciplined, shareholder-oriented value creation.
What's Weighing on the Stock?
Gross Margin Pressure From Mix Shift and Tariffs: While operating leverage is improving, Cooper faces ongoing gross margin headwinds. Management acknowledged that increasing penetration of daily silicone hydrogel lenses — central to MyDay’s growth — pressures reported gross margins, as these products sit below divisional averages.
Tariffs continue to weigh on margins, with management guiding to further gross margin decline in fiscal 2026 despite FX tailwinds. While higher revenue per patient and cost savings help offset the impact at the operating margin level, sustained mix-driven pressure could constrain earnings upside if pricing power weakens or cost efficiencies fail to scale as expected.
Regional and End-Market Volatility, Especially in Asia-Pac and Fertility: Asia-Pacific remains a notable swing factor, with China down 28% in fourth-quarter due to weakness in low-margin e-commerce channels. Management is intentionally avoiding aggressive pricing, prioritizing profitability over volume, which may cap near-term regional growth.
In the CooperSurgical segment, fertility demand remains sensitive to consumer spending, particularly outside the United States, leading management to guide conservatively for next fiscal despite early signs of improvement. Prolonged macro pressure or slower-than-expected recovery in these areas could dampen consolidated growth and delay anticipated second-half acceleration.
Estimate Trend
The Zacks Consensus Estimate for fiscal 2026 revenues is pegged at $4.31 billion, implying growth of 5.3% from the year-ago reported figure. The consensus mark for adjusted EPS is pinned at $4.51, indicating an improvement of 9.5% from the previous year’s recorded level.
In the past 60 days, COO’s earnings estimate for fiscal 2026 has moved north 11 cents.
The Cooper Companies, Inc. Price
The Cooper Companies, Inc. price | The Cooper Companies, Inc. Quote
Other Key Picks
Some other top-ranked stocks in the broader medical space are Phibro Animal Health (PAHC - Free Report) , Insulet (PODD - Free Report) and Cencora, Inc. (COR - Free Report) .
Phibro Animal Health, sporting a Zacks Rank #1 (Strong Buy) at present, has an estimated long-term growth rate of 12.8%. PAHC’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 20.77%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Phibro Animal Health’s shares have rallied 47.1% against the industry’s 4.6% decline over the past six months.
Insulet, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 29%. PODD’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 17.75%.
Insulet’s shares have lost 7.7% compared with the industry’s 4.6% decline in the past six months.
Cencora, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 11.9%. COR’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 4.9%.
Cencora’s shares have gained 13.5% compared with the industry’s 6.1% growth in the past six months.